The potential conflict of interest between a firm's owners and its managers is referred to as which type of conflict?
A)Organizational
B)Structural
C)Formation
D)Agency
E)Territorial

Question

Quizplus · Accepted Answer

The potential conflict between a firm's owners and its managers is referred to as agency conflict, where managers may pursue their own interests rather than maximizing value for shareholders. This reflects the principal-agent problem, where the principal (shareholders) hire an agent (managers) to act on their behalf but may not have perfect control over their actions.

The Potential Conflict of Interest Between a Firm's Owners and Its